China, the world’s largest battery manufacturer and the top client for Chilean lithium, is moving toward reducing its dependency on this critical mineral. On Monday, Contemporary Amperex Technology Co. Ltd (CATL), China’s battery giant, announced the commercialization of its new sodium-ion battery, branded as Naxtra.
This strategic pivot could reshape global energy supply chains, reducing costs and enhancing energy independence for Chinese firms such as BYD and Huawei, especially amid ongoing trade tensions with the United States.
“China is moving away from relying too heavily on a single raw material like lithium,” said Chris Berry, president of House Mountain Partners. “This is a geopolitical decision as much as a technological one.”
What is CATL and Why Does This Matter?
CATL is the world’s leading supplier of electric vehicle (EV) batteries, providing energy storage solutions to major automakers including Tesla, BMW, Volkswagen, and Ford. The company is investing heavily in sodium-ion battery technology to mitigate reliance on lithium and diversify toward other chemical compositions.
In Bolivia, for example, China is already securing strategic lithium reserves. Yet, it is simultaneously preparing for a future where sodium-based batteries could dominate.
A Technological and Geopolitical Strategy
Óscar Vargas Villazón, president of TKN SRL Asesores, noted that China’s focus on sodium-ion batteries reflects a state-backed plan to achieve energy independence. “China is accelerating battery R&D with governmental support, aiming to reduce its reliance on imported lithium,” he said.
CATL is building a massive production facility in Chongqing, with a targeted annual capacity of 200 GWh by 2025. Meanwhile, BYD’s upcoming sodium battery vehicles are expected to match the performance of current lithium-ion models.
“CATL’s move also aims to close the performance gap between EVs and combustion-engine vehicles,” said energy analyst Juan Carlos Guajardo. “This includes fast charging—up to 520 km range in just 5 minutes.”
Implications for Chile and the Lithium Market
This announcement is a wake-up call for Chile, which supplies a significant share of the world’s lithium. If sodium-ion technology becomes widespread, Chile may face reduced demand from one of its top export markets.
Chris Berry, however, believes there won’t be a short-term disruption: “There’s no immediate material impact, but innovation could gradually reduce demand for lithium if energy density and efficiency catch up.”
Still, the broader message is clear: China is preparing for technological autonomy, while Western economies may find themselves increasingly dependent on traditional lithium sources.